NSC Calculator: Maturity Value & Tax Amount Calculation Explained

Individuals can easily compute the amount of money they will receive at their maturity using an NSC calculator. The National Savings Certificate Scheme (NSC) interest calculator is easy to use and quickly shows results for total return on an individual’s investment.

Keep reading to learn how to calculate NSC interest rate using this online tool.

What Is an NSC Calculator?

NSC interest calculator is an online tool designed to calculate the maturity value of NSC invested in post offices for 5 years.

The National Savings Certificate Scheme is a government initiative that encourages Indian residents to save. Individuals can invest in NSC and avail the multiple benefits offered under it. These include assured interest income at maturity and tax exemption on investment amount under Section 80C of the Income Tax Act.

How to Calculate NSC Interest Rate?

As stated earlier, one can calculate the interest he/she would earn upon maturity with a National Saving Certificate calculator.

You can also perform a manual calculation to determine the total interest on your investment. However, those using an online NSC interest calculator must enter the data mentioned below –

NSC type (VIII issue/IX issue)
Purchasing date of NSC
Amount invested in National Saving Certificate Scheme
Total period
Applicable interest rate

Once you enter data in relevant boxes, the NSC returns calculator will show results.

Rate of interest will depend on the time of investment. The finance minister decides this interest rate and announces it via a circular.

As of 2021, the NSC interest rate stands at 6.8%.

Example of Calculating Interest With the Post Office NSC Calculator

The NSC calculator works on the compound interest formula. Here, the interest is compounded annually. So, the formula to calculate the maturity amount will be:

P [1+ R/100]^n

where,

Particulars	Value
Investment Amount (P)	₹1,00,000
Interest Rate (R)	6.8% p.a.
Lock-in Period(n)	5 years

Upon placing the respective values in the formula, we get,

Maturity Amount =₹ 100000[1+ 6.8/100]^5

= ₹1,46,254

As such, the total interest earned is ₹(1,46,254 - 1,00,000) = ₹46,254.

From the above calculation, it is clear that an individual investing ₹1,00,000 will earn a total interest of ₹46,254 in 5 years, and his/her total amount upon maturity.

Thus, by using an online 5-year NSC interest calculator, individuals can quickly get these mentioned results.

How to Calculate Tax Amount on the NSC Maturity Value?

As stated earlier, the investment amount under the National Savings Certificate scheme is eligible for tax exemption. This is under Section 80C of the Income Tax Act. However, interest earned on investment is not tax-free. Tax is applicable on interest as per an individual’s income tax slab rate. Here, the amount will be deductible from the total gross income to compute the taxable amount.

Note: One must remember that tax benefits are applicable on investments up to ₹1.5 lakhs.

Individuals can use an NSC tax calculator to estimate mentioned results.

Example to Calculate Tax Amount on the NSC Maturity Value

Particulars	Value
Investment Amount	₹1,50,000
Interest Rate	6.8% p.a.
Tenure	5 years

Here, we have to apply the compound interest formula of P [1+ R/100]^n.

Particulars	Calculated Value
Maturity Amount	₹2,08,424
Interest Earned	₹58, 424

Here, interest earned is taxable as per the investor’s tax slab rate.

One must remember that NSC does not reinvest the 5th year’s interest. Therefore, individuals cannot claim a deduction from this taxable income under section 80C of the Income Tax Act.

Equipped with the knowledge of using the NSC calculator, individuals can now plan their investment strategy accordingly.

Frequently Asked Questions

✓ What are the inputs required to operate a KVP calculator?

Users need to provide the initial investment amount and investment date to get the results for their maturity value via a KVP calculator.

✓ How does a KVP calculator determine the applicable interest rate for an investment?

The interest rate for the KVP scheme is set by the Ministry of Finance for a financial year. A KVP calculator uses this set of information to provide the results.